This week, Colliers Research provides insights on Megaworld Corp.’s newest condo project in Bacolod and how township developments will boost the recovery of the city’s housing sector; and OFW remittances and receipts from the BPO sector cited as among the top sources of the country’s dollar reserves and how these should propel the residential and retail sectors’ growth beyond 2022.
Megaworld eyes P1.9-B sales from ‘smart’ condo project
Megaworld is expecting to generate PHP1.9 billion (USD36.5 million) in sales from its newly launched condominium project, Herald Parksuites. This is Megaworld’s fourth residential development in its Upper East township in Bacolod. The 12-storey residential tower offers 246 “smart home” studio, one-bedroom, and two-bedroom units. Each unit is equipped with wireless smart home system and devices with Wi-Fi router, video intercoms, and a standby power generator. Herald Parksuites will also have a central amenity floor that connects to the adjacent tower, Two Regis, while the ground floor will have access to retail arcade. The project’s “green” features include low-flow water fixtures, light sensors at hallways, rainwater harvesting, and material recovery facilities.
From 2017 to 2019, Colliers recorded annual condominium launches and take-up in Bacolod reaching 900 units and 800 units, respectively. However, we saw launches and take-up dropping to 200 units and 170 units in 2021 due to the pandemic. In our opinion, the recovery in demand and supply in the Bacolod condominium market will likely be supported by the development of townships in the city, including Megaworld’s The Upper East and Northill Gateway, as well as the completion of infrastructure projects such as Bacolod–Silay Airport Access Road widening and Bacolod Economic Highway. Colliers recommends that developers upgrade their amenities in their upcoming projects to cope with the new trends in the residential market. We encourage developers to include amenities that will suit work-from-home (WFH) or hybrid work setup, such as the inclusion of coworking facilities and Wi-Fi Internet access in common areas. Results from a survey conducted by the Information Technology and Business Process Association of the Philippines (IBPAP) show that about 80% of Filipino employees prefer a hybrid work model over purely on-site. Developers should also explore incorporating green and sustainable features in their future residential developments. These include natural lighting, rainwater catchment facilities, solar panels, and vertical gardens.
Remittances seen to support recovery
The Bangko Sentral ng Pilipinas (BSP) or the central bank believes that remittances from Filipinos working abroad will continue to support the country’s economic recovery. The central bank noted that the inflows “will continue to be a significant force in the Philippine economy over the medium term.” The research released by the central bank was authored by BSP Deputy Governor Maria Almasara Cyd N. Tuaño-Amador, Director for Supervisory Policy Research Department Veronica B. Bayangos, and bank officers Marie Edelweiss G. Romarate and Carl Francis D. Maliwat. The central bank expects cash remittances to increase by 4% this year from after a 5.1% rise in 2021. Looser border and travel restrictions and continued global demand for migrant workers will support the remittance growth.
Data from the BSP show that the county’s gross international reserves (GIR) reached USD107.3 billion (PHP5.6 trillion) in March 2022, a 2.7% increase YOY. According to the central bank, remittances from overseas Filipino workers (OFW) and receipts from the business process outsourcing (BPO) sector were among the top sources of the country’s dollar reserves. Colliers believes that the stable inflow of remittances should propel growth in the residential and retail sectors beyond 2022. In our opinion, remittances will remain to be one of the primary residential demand drivers, particularly for affordable to mid-income residential projects (PHP1.7 to PHP6.0 million). Data from BSP show that the percentage of OFW households who spend their remittances for purchase of house increased to 5.2% in Q4 2021 from 4.8% in Q4 2020. We also believe that the influx of more money from Filipinos working abroad will likely anchor an increase in consumer spending, which accounted for about 73% of the Philippines’ gross domestic product (GDP) in 2021. This should positively influence retail spending especially with the easing of mobility restrictions in Metro Manila.